Switzerland is one of the DACH countries. In practice, it means that the German language is (one of) its official languages. Switzerland corresponds to CH in this shortage.
It is a fascinating country – it has been neutral in the arena of international conflicts for a long time. It is not part of the European Union but belongs to the United Nations. It is also one of the founders of the European Free Trade Association. In 2019, the population of this country was 8.57 million people.
Does it all contribute to the e-commerce stage – and if so, how?
As E-commerce Report Switzerland 2020 states:
“Strong internet shopping trend continues: Swiss consumers spent 10 billion Swiss francs online in 2019. E-commerce volume is up by 8%. Almost all study participants anticipate further growth in 2020. COVID-19 has boosted e-commerce further and this year’s results could well be three times as high as in 2019.”
Let’s check how it reflects in the state of ecommerce in Switzerland.
E-commerce in Switzerland – overview
Switzerland is the 21st largest e-commerce market by size. In 2019, revenues in this market reached USD 7 billion. It is expected that by 2024 the Swiss e-commerce market volume will amount to USD 10.701 m. This year, user penetration will reach 69.3%, while by 2024, it is forecasted to exceed 72%.
The e-commerce situation in Switzerland is good. The market is developing; new retailers appear all the time. The largest segment is Electronics and Media, it covers 31% of revenues, then Fashion -27%, Food and Personal Care – 18%, Furniture and Appliances with 14%, and last but not the least Toys, Hobby & DIY with the remaining 9%.
The most popular e-commerce in Switzerland are Swiss ricardo.ch, German amazon.de and Swiss anibis.ch. As you can see none of these is a retailer.
Trade conditions in Switzerland
The main trading areas in Switzerland are Zurich and Geneva. Mainly due to the high (compared to the rest of the country) urbanization of these regions. Also, due to the high demand of consumers, trade is booming there. Taking into account the fact that both cities are situated in beautiful regions and that they are well-connected, they attract not only Swiss but also tourists who contribute to the growth.
Also, many regard Switzerland as an European Silicon Valley, with good environment for development in the field of software and innovations.
And it doesn’t come as a surprise, bearing in mind that except for being a Silicon Valley in terms of technology, Switzerland is also leading when it comes to taxes.
Low taxes – from 10% in the region of Zug to 40% in the French part of Switzerland, encourage more and more ecommerce companies to take part in the Swiss race and run their business here.
Customers behaviour in Switzerland
In 2017, 90% of Swiss internet users shopped online at least once. Consumers spend on average USD 2,460 while shopping online. Contrary to the Germans, the Swiss like cross-border purchases – as many as 64% bet on products from abroad. One of the reasons may be the high value of the Swiss franc. More than half of cross border purchases come from Germany; the second favourite country is China. Online shopping is becoming popular among almost the entire society, but the 25-34 age group, followed by 35-44, is the most successful in this area. Third place belongs to the group of 15-24. Then 45+ consumers. Swiss consumers spend around 3.5 hours a day online, but as many as 22% surf on the Internet more than 5 hours a day. The Swiss like to be online.
What is important for Swiss consumers is the origin of the products. If they have to choose from two products with a known and unknown place of origin, they will select the first one. In this country, the price-quality ratio is essential, and the brand prestige is less important. In addition to the purchase itself, they value after-sales service.
The Swiss purchasing behaviour is aimed at reducing consumerism. And although the reasons for these decisions are different, the Swiss stick to their statement. 44% of WWF-commissioned survey respondents want to buy less to save some coins. On the other hand, 20% want to reduce the number of purchased products for the environment’s sake. An interesting aspect is a discrepancy between different regions. In the German-speaking part of the country, the desire to have more free time at the expense of buying material goods was mentioned more often than in other regions. The Italian-speaking part cares about the environment the most, while the French-speaking part wants to save money.
Payment methods in Switzerland
One of the most frequently chosen payment methods in Switzerland is the debit card – as much as 29% of transactions are done with it. Although cash is still the leader. 48% of transactions are paid in this way. While a debit card is considered to be the fastest and most reliable way of payment, the average Swiss always has some cash in the pocket.
Due to various concerns, contactless payments are not a favourite among the Swiss payment way. Despite this fact, their fans’ group grow from year to year. Especially among young adults. They more and more often pay contactless with their debit cards. Contactless payments by credit cards have much fewer fans.
We know how important contactless payments have become in the current year during the pandemic. Even though we do not have data from 2020, we can therefore assume that Switzerland has followed the global trend and become even more convinced of this type of payment.
Mobile payments are another area that is slowly gaining popularity. Every year more and more people are convinced of them. Nevertheless, there are some differences between various variants of mobile payments. In-app and mobile payments on the Internet are already quite common. However, peer-to-peer and POS solutions have not found a positive reception. Swiss consumers consider these methods unnecessary. Cryptocurrency is not very popular. Only 7% of consumers use it.
Payment safety in Switzerland
The main criterion for choosing a payment method is security. A large proportion of consumers perceive it as protection against data manipulation and confidentiality. What else is crucial – full control over the payment process and its transparency. For many consumers, transaction security is a precondition for considering a payment method at all. Cards are perceived as the safest payment method when it comes to data protection. When it comes to avoiding financial damage e-banking is number one.
For Swiss people, security is a matter that they approach holistically. They are more concerned with avoiding the consequences of a lack of security, such as losing money, than just stealing a card and having to block it.
Social media in e-commerce in Switzerland
Swiss rely on social media when it comes to online shopping. 83% of consumers searched online for a given product before buying. As many as 71% do shopping online, only 35% use mobile for this purpose.
When it comes to visiting an online store before making a final purchase, almost 70% of Swiss consumers have such a habit. As you can see the Internet has a big impact on Swiss life. The most popular social media is Facebook. So if e-commerce wants to be in touch with customers, it should be present here. YouTube and WhatsApp are also important in Swiss daily life.
What’s more, Swiss ecommerce businesses do embrace technology. Platforms are adding Buy buttons and introducing new payment functions for merchants to use. They are also uploading entire product catalogues to networks such as WhatsApp, which is often unheard of in any other countries.
Logistics in Switzerland
The main logistic channel is the route between Geneva and St. Galen. It is situated in the northern part of the country. Due to the quite mountainous terrain, logistics in this country is in a rather difficult situation.
Nevertheless, for a long time, there has been an idea for the Cargo Sous Terrain underground logistics tunnel. It would go along the eastern border of the country. The idea to move logistics underground is undoubtedly quite bold which would be a big revolution for Switzerland. But such a tunnel would certainly improve logistics activities not only in the country but also internationally.
Parcelmonitor also points out some important numbers for Swiss logistics: 1.4 days of average transit time to first delivery attempt or 9% of packages being delivered to Collection Points.
It also doesn’t come as a surprise that Germany is the country that imports to Switzerland the most. However, Austria didn’t make it to Top 5 despite being a direct neighbour of Switzerland. Italy and France, another pair of neighbours, placed 4th and 5th, with the UK and US making their way right to the podium.
Switzerland is an interesting country. As a part of the DACH region, it shows some similarities with, e.g., Germany. For consumers of both countries, safety is the priority. But there are also some differences. A great example here is cross-border shopping. Swiss do it a lot; meanwhile, Germans prefer to focus on their native market. Switzerland needs to face some challenges, also in terms of ecommerce, however watching how technology-driven this environment is, we can only expect even more innovation coming the ecommerce way. And we’re looking forward to seeing them!
If you are aiming for expansion on Swiss market or the whole DACH region, all above information should be very useful for you. Hope you find it helpful for your e-commerce. Do you want to find more info about DACH countries? Click here to read about e-commerce in Germany and follow our blog, as we are going to publish more country reports soon.